CMS to allow managed care organizations to participate in direct contracting

Dollar bill with a hole in Washington's face on it and the word "Medicaid" in its place
The Centers for Medicare & Medicaid Services proposed allowing Medicaid managed care organizations to participate in the direct contracting payment model to improve care coordination for dual-eligible beneficiaries. (zimmytws/GettyImages)

The Trump administration proposed a new initiative aimed at improving care coordination among Medicaid managed care plans for dual-eligible Medicare and Medicaid beneficiaries.

The model, announced Thursday by the Centers for Medicare & Medicaid Services (CMS), will allow Medicaid managed care organizations (MCOs) to participate in the global and professional options in the agency’s direct contracting model, which offers voluntary risk-sharing agreements with providers.

“For too long we have struggled to deliver acceptable outcomes for this vulnerable population, but today’s model is a game-changer,” CMS Administrator Seema Verma said in a statement Thursday. “It represents a significant step toward addressing these longstanding issues and ensuring they receive the coordinated care they rightfully deserve.”

The professional direct contracting option offers primary care capitation, which is a risk-adjusted monthly payment for enhanced primary care services. The global option gives two payment options: primary care capitation or total care capitation that offers payments for all services made by a provider.

RELATED: CMS rolls out geographic direct contracting model aimed at improving regional health outcomes

CMS laid out some examples of how an MCO could use the voluntary direct contracting model, including:

  • Entering into value-based purchasing agreements with nursing facilities that factor in facility hospitalization rates
  • Establishing processes to connect beneficiaries with a primary care provider
  • Targeting care coordination resources toward beneficiaries that have a high risk of Medicare spending
  • Having care coordinators and in-home aides that provide Medicaid long-term services to help enrollees with managing medical appointments

Any MCO that participates in direct contracting needs to get a letter of support from their state Medicaid agency to ensure participation aligns with any state-managed plans.

They also have to have an active contract with the state.

An applicable MCO must also cover any long-term support and services such as being at risk for nursing home costs “and/or behavioral health services for people with serious mental illness/substance use disorder—unless the state managed care program excludes such individuals,” according to a fact sheet on the initiative.

Any MCO must also have a minimum of 3,000 aligned beneficiaries prior to the start of each performance year, the agency added.

CMS said that last year there were 12.2 million Americans who were dual-eligible beneficiaries, and they are an especially high-need population.

“These dually eligible individuals must navigate two separate programs for their healthcare: Medicare for the coverage of most preventive, primary, and acute health care services and drugs, and Medicaid for coverage of long-term services and supports, certain behavioral health services, and for help with Medicare premiums and cost sharing,” CMS said in a release.

The Center for Medicare and Medicaid Innovation, which oversees payment models, will release a request for applications early next year for MCOs. Such organizations can start participating in the model in January 2022.